5 ms·

This is a good quote and I like it, but it's funny- I feel like what this quote best demonstrates is a basic difference in conscientiousness between the Chicago

This is a good quote and I like it, but it's funny- I feel like what this quote best demonstrates is a basic difference in conscientiousness between the Chicago school folks and the Keynes folks. If I buy a birthday present for someone, I care very much about the content of the present.

ptero 8y ago
I felt the same way on first reading, but then decided that I misinterpreted "someone" to mean "someone really close to me": spouse, kids, parents, etc. This is similar to buying things for myself. I believe in MF quote "someone" is better described as "someone you do not personally know or maybe see once". A model for that is buying a gift for a Yankee Swap party. Or for a child I do not know: something to cheer them up, but as I do not know if (s)he likes dolls or trucks I can go with a safe, generic choice, e.g., a book. That is, I am still trying to do a good thing, but am not too worried that I will guess incorrectly.
- Retra 8y ago
  Seems that this is the problem empathy was meant to solve.
  - ptero 8y ago
    I am not sure I understand. My claim is the situation where you spend your money on someone else is not that "I do not care" (which the empathy can help solve), but "I do not know", so I will make an optimal choice: decent gift at reasonable cost; paying more can give poor ROI since I do not know what exactly to spend more money on.
    - Retra 8y ago
      What I'm saying is that empathy is completely useless... other than the fact that it allows you to turn "someone I don't care about" into "someone I don't know, but care about enough to make meaningful sacrifices for." So the whole point of empathy is that it allows you to avoid a frame of mind where you're spending other peoples' money on things that don't benefit anybody.
iambateman 8y ago
One could hypothesize that the character traits which lead someone to become a respected economist do not lend themselves to adept gift-giving. ;)
geofft 8y ago
I wonder the extent to which the problem is merely "Government should have moral people." (With the obvious caveat that those who proclaim their morality loudly are probably not the most moral.) In the private sector there are plenty of cases where you're spending someone else's money on someone else and you care about doing a good job of it—and often without the requirement of personal mores as motivation. Banks and investment managers, for instance, basically do this. Some of course are awful, but some (loosely correlated with the ones who have been around for a while and built a reputation) actually do care about getting good results without excessive risk and without deception. Do the people who agree with Friedman's statement about government also conclude that private banks are bad too and people need to look out for their own money?
zeroname 8y ago
...implying that the Keynesians are really empathetic and that the Chicago school folks are cold-hearted technocrats. That kind of emotionality is what keeps people from making reasonable decisions on economic policy. It would be nice if the kind of naive Keynesianism that politicians love to apply actually worked. It would be nice if you could spend yourself out of a recession. Unfortunately, politicians only like the spending part of the equation, not the savings part. It's important to note that the Chicago school does build on Keynesian insights. It's an attempt at improving upon its failures.
- AbrahamParangi 8y ago
  I’ll ignore the greentext style intro. I suspect that the truth of the matter is that conscientiousness varies across the human population and that the best analysis takes into account this fact. To ignore rational self interest is naive and plainly wrong- but it is also wrong to ignore the impact of high conscientiousness on decision-making. I say this without condoning or condemning either configuration.
- Tyrek 8y ago
  Do you mean the Keynesianism that is commonly applied, also known as 'let's increase spending on random shit that will benefit by stakeholders, but will have minimal impact on the overall health of the economy?'. Keynesians haven't been in a position to dictate fiscal policy (as opposed to monetary policy, aka the Fed) for at least the past 3 decades.
conanbatt 8y ago
The majority of gifts, and thus their aggregate, are worth less than their cost to the receiver. This is because if the receiver can afford it and thought it was good, he would already have it. Because he doesn't, getting it as a gift is worse than getting money. Alternative economic interpretation: if you gave someone the choice between item X and money worth X, the gift is good only if the recipient would choose item. If they were to choose the money, then they are always short-changed. Gifting is economically inefficient.
- gmadsen 8y ago
  I think you are missing the sentimental aspect of gift giving. It is not purely price/utility value. Emotions attached to gift giving have value for both the giver and the receiver.
  - conanbatt 8y ago
    I feel pretty good giving money away as well!
    - Firadeoclus 8y ago
      That may be so, but it doesn't generalize to the whole population. > This is because if the receiver can afford it and thought it was good, he would already have it. Assuming they a) know about it and its qualities, b) know how to get it, c) can do so without hassle, and d) truly know what they want and need. Then there are people who hate to choose, but trust certain others to make a good choice for them.
beatgammit 8y ago
I do too, but I'm probably going to do less research into it. I may spend a little more on a single item instead of buying two less expensive "diamonds in the rough" like I would for myself. When buying for someone else, my biggest concern is to not look cheap. When buying for myself, my biggest concern is getting the best value. When using someone else's money, I'd be less cost conscious because I'm not feeling the hit. I definitely care about what I give someone, but I care about different things than when buying for myself. You can see this in politics. Politicians have the best benefits in government, and when they pass a bill, they want to significantly affect the most people, even if the impact isn't as good as a better thought out system. Case in point: the ACA impacts most Americans, but prices for medical care overall have gone up. For those 87%, it sure seems like a good deal because they don't see the true cost (lots of deficit spending and worse care than a single payer system).
Uberphallus 8y ago
It's not about conscientiousness, it's about quality of information. When you buy something for you, you know your exact needs and how to evaluate compromises. For gifts you care, but not as much since you lack significant information. You get something that is "good enough". For close friends you'll land a great gift in value and cost, but when you don't know the person very much, the gift usually tends to become an Amazon gift card or the like, since any guess may be a poor choice. For example, many years ago I bought a projector with all the money I had saved (still student, at my parents), and I projected films on the wall, which was suboptimal but I was fine with that. On my birthday my friends got a sliding screen to hang from the ceiling! And I thank them very much for it! But even if they took the measures and all while visiting me, they missed the fact that the ceiling was ultra light drywall, rendering the gift useless.
- dragonwriter 8y ago
  > you know your exact needs and how to evaluate compromises. This is one of the premises underlying rational choice theory that doesn't hold up to empirical investigation.

ptero 8y ago

I felt the same way on first reading, but then decided that I misinterpreted "someone" to mean "someone really close to me": spouse, kids, parents, etc. This is similar to buying things for myself. I believe in MF quote "someone" is better described as "someone you do not personally know or maybe see once". A model for that is buying a gift for a Yankee Swap party. Or for a child I do not know: something to cheer them up, but as I do not know if (s)he likes dolls or trucks I can go with a safe, generic choice, e.g., a book. That is, I am still trying to do a good thing, but am not too worried that I will guess incorrectly.

Retra 8y ago
Seems that this is the problem empathy was meant to solve.
- ptero 8y ago
  I am not sure I understand. My claim is the situation where you spend your money on someone else is not that "I do not care" (which the empathy can help solve), but "I do not know", so I will make an optimal choice: decent gift at reasonable cost; paying more can give poor ROI since I do not know what exactly to spend more money on.
  - Retra 8y ago
    What I'm saying is that empathy is completely useless... other than the fact that it allows you to turn "someone I don't care about" into "someone I don't know, but care about enough to make meaningful sacrifices for." So the whole point of empathy is that it allows you to avoid a frame of mind where you're spending other peoples' money on things that don't benefit anybody.

iambateman 8y ago

One could hypothesize that the character traits which lead someone to become a respected economist do not lend themselves to adept gift-giving. ;)

geofft 8y ago

I wonder the extent to which the problem is merely "Government should have moral people." (With the obvious caveat that those who proclaim their morality loudly are probably not the most moral.) In the private sector there are plenty of cases where you're spending someone else's money on someone else and you care about doing a good job of it—and often without the requirement of personal mores as motivation. Banks and investment managers, for instance, basically do this. Some of course are awful, but some (loosely correlated with the ones who have been around for a while and built a reputation) actually do care about getting good results without excessive risk and without deception. Do the people who agree with Friedman's statement about government also conclude that private banks are bad too and people need to look out for their own money?

zeroname 8y ago

...implying that the Keynesians are really empathetic and that the Chicago school folks are cold-hearted technocrats. That kind of emotionality is what keeps people from making reasonable decisions on economic policy. It would be nice if the kind of naive Keynesianism that politicians love to apply actually worked. It would be nice if you could spend yourself out of a recession. Unfortunately, politicians only like the spending part of the equation, not the savings part. It's important to note that the Chicago school does build on Keynesian insights. It's an attempt at improving upon its failures.

AbrahamParangi 8y ago
I’ll ignore the greentext style intro. I suspect that the truth of the matter is that conscientiousness varies across the human population and that the best analysis takes into account this fact. To ignore rational self interest is naive and plainly wrong- but it is also wrong to ignore the impact of high conscientiousness on decision-making. I say this without condoning or condemning either configuration.
Tyrek 8y ago
Do you mean the Keynesianism that is commonly applied, also known as 'let's increase spending on random shit that will benefit by stakeholders, but will have minimal impact on the overall health of the economy?'. Keynesians haven't been in a position to dictate fiscal policy (as opposed to monetary policy, aka the Fed) for at least the past 3 decades.

conanbatt 8y ago

The majority of gifts, and thus their aggregate, are worth less than their cost to the receiver. This is because if the receiver can afford it and thought it was good, he would already have it. Because he doesn't, getting it as a gift is worse than getting money. Alternative economic interpretation: if you gave someone the choice between item X and money worth X, the gift is good only if the recipient would choose item. If they were to choose the money, then they are always short-changed. Gifting is economically inefficient.

gmadsen 8y ago
I think you are missing the sentimental aspect of gift giving. It is not purely price/utility value. Emotions attached to gift giving have value for both the giver and the receiver.
- conanbatt 8y ago
  I feel pretty good giving money away as well!
  - Firadeoclus 8y ago
    That may be so, but it doesn't generalize to the whole population. > This is because if the receiver can afford it and thought it was good, he would already have it. Assuming they a) know about it and its qualities, b) know how to get it, c) can do so without hassle, and d) truly know what they want and need. Then there are people who hate to choose, but trust certain others to make a good choice for them.

beatgammit 8y ago

I do too, but I'm probably going to do less research into it. I may spend a little more on a single item instead of buying two less expensive "diamonds in the rough" like I would for myself. When buying for someone else, my biggest concern is to not look cheap. When buying for myself, my biggest concern is getting the best value. When using someone else's money, I'd be less cost conscious because I'm not feeling the hit. I definitely care about what I give someone, but I care about different things than when buying for myself. You can see this in politics. Politicians have the best benefits in government, and when they pass a bill, they want to significantly affect the most people, even if the impact isn't as good as a better thought out system. Case in point: the ACA impacts most Americans, but prices for medical care overall have gone up. For those 87%, it sure seems like a good deal because they don't see the true cost (lots of deficit spending and worse care than a single payer system).

Uberphallus 8y ago

It's not about conscientiousness, it's about quality of information. When you buy something for you, you know your exact needs and how to evaluate compromises. For gifts you care, but not as much since you lack significant information. You get something that is "good enough". For close friends you'll land a great gift in value and cost, but when you don't know the person very much, the gift usually tends to become an Amazon gift card or the like, since any guess may be a poor choice. For example, many years ago I bought a projector with all the money I had saved (still student, at my parents), and I projected films on the wall, which was suboptimal but I was fine with that. On my birthday my friends got a sliding screen to hang from the ceiling! And I thank them very much for it! But even if they took the measures and all while visiting me, they missed the fact that the ceiling was ultra light drywall, rendering the gift useless.

dragonwriter 8y ago
> you know your exact needs and how to evaluate compromises. This is one of the premises underlying rational choice theory that doesn't hold up to empirical investigation.